Re Barleycorn Enterprises Ltd
Encyclopedia
Re Barleycorn Enterprises Ltd [1970] Ch 465 is a UK insolvency law
case, concerning the priority of creditors in a company winding up. It was held that fees for liquidation came in priority to preferential claims and floating charges. This was overturned by the House of Lords in Buchler v Talbot, but reinstated by Parliament through an amendment to the Insolvency Act 1986
s 176ZA.
However, the company liquidator argued that the accountants should only be paid after preferential creditors and debenture holders. In this case, there was no money left. The judge at first instance, Sir Owen Temple Morris QC, held that the accountants had priority. The liquidator appealed.
Sachs LJ concurred.
Phillimore LJ agreed.
UK insolvency law
United Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...
case, concerning the priority of creditors in a company winding up. It was held that fees for liquidation came in priority to preferential claims and floating charges. This was overturned by the House of Lords in Buchler v Talbot, but reinstated by Parliament through an amendment to the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
s 176ZA.
Facts
Barleycorn Enterprises Ltd had been put into compulsory winding up. The directors had employed Cardiff based chartered accountants, Mathias and Davies, to prepare a financial statement for the company. Their fee was £202 10s, and were approved by the official receiver.However, the company liquidator argued that the accountants should only be paid after preferential creditors and debenture holders. In this case, there was no money left. The judge at first instance, Sir Owen Temple Morris QC, held that the accountants had priority. The liquidator appealed.
Judgment
The Court of Appeal held that the accountants' fees fell under the expenses of liquidation. Lord Denning MR gave the first judgment.Sachs LJ concurred.
Phillimore LJ agreed.
See also
- Buchler v Talbot [2004] UKHL 9, [2004] 2 AC 298
- Insolvency Act 1986Insolvency Act 1986The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
s 176ZA - Re MC Bacon Ltd (No 2) [1991] Ch 127